EU Launches Probe Into Amazon's E-Books Business

The anti-trust investigation will focus on parts of contracts with publishers that "seem to shield Amazon from competition from other e-book distributors."

The European Union has launched a formal antitrust probe into Amazon.com's electronic books business to determine whether the e-commerce giant uses its market power to the detriment of publishers and consumers.

The European Commission, which handles EU antitrust issues, said the investigation would focus on parts of the technology giant's contracts with publishers that "seem to shield Amazon from competition from other e-book distributors."

The commission will particularly look at so-called most-favored nation clauses as they may affect pricing competition and consumer choice. "These clauses require publishers to inform Amazon about more favorable or alternative terms offered to Amazon’s competitors and/or offer Amazon similar terms and conditions than to its competitors, or through other means ensure that Amazon is offered terms at least as good as those for its competitors," it said.

"The commission has concerns that such clauses may make it more difficult for other e-book distributors to compete with Amazon by developing new and innovative products and services," it concluded.

Amazon, led by CEO Jeff Bezos, is the dominant e-book distributor in Europe, with some publishers having highlighted its strong market position.

Amazon is cooperating with the probe. The Wall Street Journal cited the company as saying that it was confident that its deals with publishers were "legal and in the best interests of readers."

The EU in 2011 started probing Apple and five publishers on suggestions that they may have colluded to fix e-book prices. The case was settled, and the companies altered their contracts.

The Amazon probe is the latest EU investigation of U.S. technology giants, including Amazon and Google. Observers have said they could have an impact on their presence and operations in Europe.

EU antitrust commissioner Margrethe Vestager said about the Amazon probe: "Amazon has developed a successful business that offers consumers a comprehensive service, including for e-books. Our investigation does not call that into question. However, it is my duty to make sure that Amazon's arrangements with publishers are not harmful to consumers by preventing other e-book distributors from innovating and competing effectively with Amazon. Our investigation will show if such concerns are justified."